Vocational Education and the American Economy

If vocational education is so important, how come the U.S. economy is doing so well? The United States is not on anyone’s list of countries with the best vocational education and training systems. But the U.S. economy is surprisingly healthy compared to the other major industrial powers. How come? Does that suggest that having a strong vocational education and training system is not all that important to national economic success?

The answer to that question is little complicated. American manufacturing companies are pulling out of a real hole and doing better than anyone expected, contributing to a dramatic rise in American exports and, therefore, to a decline in the trade deficit. The wealthiest Americans are doing very well, too, not least because the stock market keeps setting new highs.

But unemployment is still very high. And the unemployment figures do not include the millions of workers, mainly men over fifty, who used to have good jobs, were laid off, and have given up looking for work. The U.S. unemployment rate among young people, especially minority young people, is frightening. Their income will suffer through their entire work lives because of their inability to become part of the active workforce and start moving up the ladder during these crucial years. A large fraction of the workers who used to have regular full time jobs at big firms, are now “contingent” workers, who are, in effect, on call. They work whenever their old employer or some other company needs them. Whatever job security they used to have has evaporated and they don’t get any benefits from any of their employers. This recession, though, was not unique. Over the last couple of decades, each “recovery” has been more jobless. Average real wages have been stagnating and declining for a long time.

But the professionals who have the skills most in demand are doing very well. They are able to choose where they want to live and work, and are making very good money. These are the people who invent the future at Google, create a whole new level of animated and special effects films for global distribution, redesign mega-cities, come up with new financial instruments and invent treatments for age-old diseases.

So why are so many companies and some workers doing so well while so many of our people are really struggling?

One reason is that an increasing share of American companies are making and selling much more of their output abroad than used to be the case, so much more of their workforce is not made up of Americans. This is less because they can get cheaper labor abroad than because they know that future market growth lies mostly in places like Asia and Latin America, not in the United States. That’s where their customers are.

Another reason is automation. The New York Times recently ran an article telling us that the textile industry is coming back to the United States. But that same article describes a new mill in South Carolina that produces 2.5 million pounds of yarn a week with about 140 workers. The same volume of production in 1980 would have required 2,000 workers. “Machines,” The Times reports, “have replaced humans at almost every point in the production process.” But The Times also reports that “…companies that want to make things here often have trouble finding qualified workers for specialized jobs.”

To see why, we have to go back to 1973. That was the year that the draft was abolished and the all-volunteer army began. Prior to 1973, Army recruits were very well trained by the military for a wide range of occupations, most of which were in demand in the civilian economy. Because most of the force consisted of conscripts who would leave at the first opportunity, the Army’s vocational training system provided a very large and very important stream of very well trained workers for the civilian economy. The training still goes on, but those who receive it intend to make a career in the Army, not in the civilian world, so the civilian sector suffered a very large loss of trained labor.

The 1970s also saw another portentous change, this one in American high schools. Prior to that decade, most medium and large cities had vocational high schools for the trades, many of which were highly regarded selective institutions. They limited admissions to the number of students needed to fill the openings projected by employers. But, these selective vocational schools were abolished in the 1970s and 80s. All high schools were asked to offer vocational training. The close relationship with employers dissolved. The comprehensive high school found it very difficult to get up-to-date equipment or qualified instructors. The country turned its attention to raising academic standards. Many fewer solid vocational courses were offered. High school vocational education became a dumping ground for students judged to be incapable of academic education.

A few states managed to maintain strong vocational programs. Some states have managed to keep some vitality in their community college technical programs. The National Science Foundation has stimulated the development of some strong advanced manufacturing programs in a few community colleges. Harvard University and Jobs For the Future have started a promising program called Pathways to Prosperity. And President Obama has been using his bully pulpit to promote a new generation of high school programs epitomized by the Pathways in Technology Early College High School sponsored by IBM in New York City. But the United States has a long way to go to match the standing it once had among the nations in the arena of vocational and technical education.

So, “If vocational education is so important, how come the U.S. economy is doing so well?” The answer, as I see it, is that U.S. companies are doing well and the shareholders in those companies are doing well, but most U.S. workers are not doing well. If that continues much longer, there is good reason to believe that the American economy will no longer continue to do well. The economy will only work in the long run if it has an adequate supply of highly trained technical staff in its middle and lower ranks. Only a greatly strengthened vocational education program can provide that.